What is a "closed" monetary system? A link to those posts where you show how Bitcoin enslaves people would be helpful.

A system where the people who have the money control the money. Money needs to be a tool, not a scarce resource to be manipulated. It stores value and facilitates trade. The bitcoin mentality has it so ingrained that scarcity matters because that's how gold works, and gold was less abusive because it was somewhat harder to control than fiat. But gold was still controlled very heavily. This control was originally separate from government so you can't go blaming them. The same thing will happen with bitcoin. If it were freicoin, I don't doubt it would happen there too because you will eventually get an upper class that can start manipulating supply--it would be more expensive though.

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I've just been skimming over the EnCoin stuff until it has a working alpha, and almost entirely tune out the "I discovered Bitcoin's fatal flaw!" posts.

:shrug: I don't worry about that stuff anymore. Now it's just about refining all of the ideas.

"Your bitcoin is secured in a way that is physically impossible for others to access, no matter for what reason, no matter how good the excuse, no matter a majority of miners, no matter what." -- gmaxwell

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The bitcoin mentality has it so ingrained that scarcity matters because that's how gold works, and gold was less abusive because it was somewhat harder to control than fiat.

Scarcity obviously does matter. The alternative to scarcity is superabundance, and why would you offer goods or services in exchange for something you already have in whatever quantity you happen to need? A currency has to be something people desire, and thus will trade for, and that means it has to be scarce.

Of course, there are different ways of ensuring scarcity. You can trade in something that is inherently scarce, like gold (due to nature) or bitcoins (due to math), or you can take something which is not inherently scarce and use force to make it so, as in fiat currency. This seems like a third way, where the scarcity rests on the difficulty of getting existing currency-holders to agree to devalue their own shares, with no apparent benefit to themselves. I'd say that represents a fairly strong guarantee of scarcity, though why anyone would expect others to prefer it over BTC is a bit of a puzzle.

Scarcity obviously does matter. The alternative to scarcity is superabundance, and why would you offer goods or services in exchange for something you already have in whatever quantity you happen to need? A currency has to be something people desire, and thus will trade for, and that means it has to be scarce.

The alternative to scarcity is not necessarily "superabundance", there might be a mythical third option where there is "just enough."

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This seems like a third way, where the scarcity rests on the difficulty of getting existing currency-holders to agree to devalue their own shares, with no apparent benefit to themselves. I'd say that represents a fairly strong guarantee of scarcity, though why anyone would expect others to prefer it over BTC is a bit of a puzzle.

Because an appreciating currency is a bad thing for investment. I've mentioned in other threads, if businesses can't get BTC loans because they are untenable compared to fiat loans, businesses are not going to accept BTC for payment. This means, wait for it, in the real world, BTC is never going to become as popular as it could be. The price fluctuations, up or down, are going to be very unappealing. Instead of BTC bleeding value off of fiat currency to itself, it feeds from its very own instead. https://bitcointalk.org/index.php?topic=91183.0 if you have any questions about that, ask in that thread.

The alternative to scarcity is not necessarily "superabundance", there might be a mythical third option where there is "just enough."

"Mythical" is correct. Your "third option" is just a point close to the boundary line, but still on one side or the other. If the way a resource is allocated matters--if there is any need whatsoever to balance competing demand for it--then it's scarce. Otherwise, it's superabundant. There is no middle ground.

... why anyone would expect others to prefer it over BTC is a bit of a puzzle.

Because an appreciating currency is a bad thing for investment. I've mentioned in other threads, if businesses can't get BTC loans because they are untenable compared to fiat loans, businesses are not going to accept BTC for payment.

This is a blatant non-sequitur. If businesses can't get loans in BTC because the rate of deflation is higher than the prevailing interest rate, that means BTC is more valuable, and the demand for BTC as payment will be higher, not lower. Businesses are not going to arbitrarily turn away a form of payment which will increase in value after they accept it. The problem (if any) is getting buyers to part with it.

The more typical complaint regarding appreciating currency is that no one will want to spend it, knowing that if they wait it will buy more in the future. Of course, that doesn't take into account that at some point present demand exceeds the net present value of the currency, even if that currency is appreciating, or that the seller can take appreciation into account when setting the price (which generally works out to the seller's benefit, as the party with the lower time preference). There have been markets with consistent relative currency appreciation before (e.g. electronics), and trade didn't come to a halt because of it.

Yeah people will perceive bitcoin as more valuable and demand it more often than freicoin. The only time I see freicoin being useful is during a price shock period in bitcoin. But because freicoin is still using the same or similar distribution, it is going to have the same problem. All other things being equal, and all other things will be equal, bitcoin will either have a better return for taking it over freicoin, or they might be about equal but freicoin came second. The idea does not compete at all.

Freicoin is definitely a step in the right direction, but it is not nearly enough to overcome the first-to-market power of bitcoin.

Many in the community think Bitcoin has value something simply because scarcity is programmed into it. I agree that this, alone, is meaningless.

Freicoin will be more stable for those that actually want to conduct business with the currency and not have to worry about it greatly appreciating (or depreciating) due to external circumstances.

As to your currency proposal, Decrits/EnCoin -- I don't to see any evidence you are actually working on it, or know how to make it happen. Other than "it would be nice if my currency had a stable value" I don't really see anything. Mark spells out precisely what the mechanism is used to achieve stable value, and it will work.

I do not have the technical ability to make Freicoin or any other cryptocurrency happen. Mark does. So I help in what ways I can. If you believe in your EnCoin idea you should help too, because this is your best bet for it to actually happen. One step closer is vastly superior to nothing at all.

Freicoin will be more stable for those that actually want to conduct business with the currency and not have to worry about it greatly appreciating (or depreciating) due to external circumstances.

But this simply is not true. They will have to worry about it greatly appreciating every time the network expands, just like bitcoin. It's going to take what, 15 years for half of the money supply to recirculate?

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As to your currency proposal, Decrits/EnCoin -- I don't to see any evidence you are actually working on it, or know how to make it happen. Other than "it would be nice if my currency had a stable value" I don't really see anything. Mark spells out precisely what the mechanism is used to achieve stable value, and it will work.

And I don't see any evidence that you guys are working on anything either. Just asking for $28k for a couple line changes and to create advertisement. Freicoin was proposed over a year ago and the best this group has come up with is a webpage to ask for money. Demurrage is not some precise mechanism that will bring a stable value on top of an inherently unstable coinbase, no matter how well Mark may be able to spell.

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I do not have the technical ability to make Freicoin or any other cryptocurrency happen. Mark does. So I help in what ways I can. If you believe in your EnCoin idea you should help too, because this is your best bet for it to actually happen. One step closer is vastly superior to nothing at all.

Anything built off of bitcoin just isn't worth the time. And you guys should be very careful about merged mining when there are 12-year-old l33t h4x0rz running large pools.

Freicoin will be more stable for those that actually want to conduct business with the currency and not have to worry about it greatly appreciating (or depreciating) due to external circumstances.

But this simply is not true. They will have to worry about it greatly appreciating every time the network expands, just like bitcoin. It's going to take what, 15 years for half of the money supply to recirculate?

Yes, freicoin will have price deflation when the network expands.But who exactly need t worry about it? Mainly borrowers, so they won't denominate their loans in neither bitcoin or freicoin, at least until those risks become smaller. I don't expect merchants to price in freicoins neither, at least not soon. But bitcoin seems to be dealing well with that "problem".You can define a stable unit like usd1970, terras, a basket of 30000 different goods and services or whatever you prefer. But you cannot create a cash-money that ensures a stable price. Well, you could do it with a central bank issuing monopoly freigeld. But you can't do it without manipulating the market or redistributing wealth somehow. The only thing a cash-money needs that bitcoin doesn't have is a compulsion to circulate. For the financial problem, I think we will see some innovations too. Decoupling loan contracts from cash-money units and using indexes or virtual baskets instead. That way you may not need to factor the inflation premium into the interest rate.

The only thing a cash-money needs that bitcoin doesn't have is a compulsion to circulate.

Why does cash-money require a compulsion to circulate? I'm sure you'll explain this away as saying you didn't really mean this word, but something like "incentive", but I find it interesting nonetheless.

Quote from: wiktionary link=http://en.wiktionary.org/wiki/compulsion

compulsion

1. An irrational need to perform some action, often despite negative consequences.2. The use of authority, influence, or other power to force (compel) a person or persons to act.3. The lawful use of violence (i.e. by the administration).

Do you understand the concept of time preference? Even if the exchange rate between bitcoins and some good I desire is constantly changing in my favor, I still desire that good and at some point my preference for the good now overrides my preference for a lower cost later. For a real life example, you must look no further than consumer technology like computers and televisions. If I wait a year to buy one, the cost will go down and the quality will go up. Yet, I still buy one today because otherwise I will be forced to go a whole year without.

Freicoin will be more stable for those that actually want to conduct business with the currency and not have to worry about it greatly appreciating (or depreciating) due to external circumstances.

But this simply is not true. They will have to worry about it greatly appreciating every time the network expands, just like bitcoin. It's going to take what, 15 years for half of the money supply to recirculate?

Yes, freicoin will have price deflation when the network expands.But who exactly need t worry about it? Mainly borrowers, so they won't denominate their loans in neither bitcoin or freicoin, at least until those risks become smaller. I don't expect merchants to price in freicoins neither, at least not soon. But bitcoin seems to be dealing well with that "problem".You can define a stable unit like usd1970, terras, a basket of 30000 different goods and services or whatever you prefer. But you cannot create a cash-money that ensures a stable price. Well, you could do it with a central bank issuing monopoly freigeld. But you can't do it without manipulating the market or redistributing wealth somehow. The only thing a cash-money needs that bitcoin doesn't have is a compulsion to circulate. For the financial problem, I think we will see some innovations too. Decoupling loan contracts from cash-money units and using indexes or virtual baskets instead. That way you may not need to factor the inflation premium into the interest rate.

EnCoin is "manipulated" by predetermined rules. Instead of a specific quantity of coins, it has a specific difficulty based on Koomey's law. This introduces trust/coordination problems that are addressed in different ways, but it doesn't introduce money supply manipulation.

But who exactly need t worry about it? Mainly borrowers, so they won't denominate their loans in neither bitcoin or freicoin, at least until those risks become smaller. I don't expect merchants to price in freicoins neither, at least not soon. But bitcoin seems to be dealing well with that "problem".

You claim that bitcoin is doing well, but we don't know what could have happened had it not already experienced a bubble. But c'mon, the system is just designed to bubble and burst. It may always end up better than before the bubble, but the waves created in the mean time will be fierce.

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You can define a stable unit like usd1970, terras, a basket of 30000 different goods and services or whatever you prefer. But you cannot create a cash-money that ensures a stable price. Well, you could do it with a central bank issuing monopoly freigeld. But you can't do it without manipulating the market or redistributing wealth somehow.

I have definitely conceded these things with my own latest proposal, and I think it is a much saner system than bitcoin's or freicoin's.

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For the financial problem, I think we will see some innovations too. Decoupling loan contracts from cash-money units and using indexes or virtual baskets instead. That way you may not need to factor the inflation premium into the interest rate.

This all sounds nice, but you still need to get away from limited supply and the rest of bitcoin's archaism such as using energy to secure the network.

@Etlase2, @jtimon and I simply don't agree with your conclusions, and we'll have to leave it at that. Let's please leave discussion of your proposal to its own thread.

At the very least you could stop wasting thought energy on how to implement pruning. Switch to an account ledger instead of a transaction ledger. If at the very least you want to accomplish something, you should try some major improvements on the protocol. That way at least there is actually progress instead of sidegress.

This all sounds nice, but you still need to get away from limited supply and the rest of bitcoin's archaism such as using energy to secure the network.

Using energy to secure the network isn't bitcoin's archaism. Using energy to secure the financial system is a condition that has existed for all of human history. The question: how much energy?

I think Bitcoin uses a lot less energy than any other possible solution. We're trying to trying our hardest to turn the economy from a horse and buggy to a Carnot cycle. Anybody with notions that the Bitcoin method of securing the blockchain is not "sustainable" or "green" has not considered how much energy is spent in just one day of a War. What are we not trying to do? We are NOT trying to create a perpetual motion machine.

I don't have all the problems written down, but I do have most of the solutions here: https://bitcointalk.org/index.php?topic=91183.0 although I have not gone into much technical detail since I drove through most of that during the encoin process.

Using energy to secure the network isn't bitcoin's archaism. Using energy to secure the financial system is a condition that has existed for all of human history. The question: how much energy?

You say it's not archaic, then go on to say this is the way it has been done for all history.

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I think Bitcoin uses a lot less energy than any other possible solution. We're trying to trying our hardest to turn the economy from a horse and buggy to a Carnot cycle. Anybody with notions that the Bitcoin method of securing the blockchain is not "sustainable" or "green" has not considered how much energy is spent in just one day of a War. What are we not trying to do? We are NOT trying to create a perpetual motion machine.

I'm not saying it's bad because it uses energy, I'm saying it's bad because it's not secure (he who controls the hardware and/or money controls the money) and it only encourages wastefulness when it is not absolutely necessary. Every tx fee or every amount of demurrage is going to have to be paid for again and again and again. But getting around that is more complicated than switching to an account ledger, I think.

I'm not saying it's bad because it uses energy, I'm saying it's bad because it's not secure (he who controls the hardware and/or money controls the money) and it only encourages wastefulness when it is not absolutely necessary. Every tx fee or every amount of demurrage is going to have to be paid for again and again and again. But getting around that is more complicated than switching to an account ledger, I think.

Having a paper backup does not make your money less secure. Paper, electronic, and brain wallets all work together to provide the ultimate security. The only thing I don't like about paper wallets is the current single address. There isn't a good way to encrypt them to prevent theft. Paper wallets will greatly benefit from multisig.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.

That is hardly a weakness--it is exactly where the security of bitcoin comes from!

But regardless, although this is an interesting and valuable discussion, it should be held in a separate thread; we have wandered significantly off-topic. Freicoin is and will always be a proposal within the framework of bitcoin-like systems.

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